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| Delaware                                                       |         |   |         | 77-0262908                           |
|----------------------------------------------------------------|--------------|--------|--------------|--------------------------------------|
| (State or Other Jurisdiction of Incorporation or Organization) |    |   |    | (IRS Employer Identification Number) |

| 3590 East Columbia Street                |   |       |
|------------------------------------------|--------|------------|
| Tucson, Arizona                          |   | 85714      |
| (Address of Principal Executive Offices) |   | (Zip Code) |

| Large accelerated filer:  ̈ |   | Accelerated filer:x |   | Non-accelerated filer:  ̈            |   | Smaller reporting company:  ̈ |
|---------------------------------|--------|--------------------------|--------|-----------------------------------------------|--------|-----------------------------------|
|                            |   |                     |   | (Do not check if a smaller reporting company) |   |                              |

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| PART I.  FINANCIAL INFORMATION |                                                                                                           |
|------------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                     |                                                                                                           |
| ITEM 1.                                  | Condensed Consolidated Financial Statements                                                                    | 1 |
|                                     |                                                                                                           |   |
|                                     | Condensed Consolidated Balance Sheets as of March 31, 2011 (Unaudited) and December 31, 2010                   | 1 |
|                                     |                                                                                                           |   |
|                                     | Condensed Consolidated Statements of Operations for the three months ended March 31, 2011 and 2010 (Unaudited) | 2 |
|                                     |                                                                                                           |   |
|                                     | Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010 (Unaudited) | 3 |
|                                     |                                                                                                           |   |
|                                     | Notes to Condensed Consolidated Financial Statements                                                           | 4 |
|                                     |                                                                                                           |   |
| ITEM 2.                                  | Management's Discussion and Analysis of Financial Condition and Results of Operations                          | 10 |
|                                     |                                                                                                           |   |
| ITEM 4.                                  | Controls and Procedures                                                                                        | 13 |
|                                     |                                                                                                           |   |
| PART II.  OTHER INFORMATION    |                                                                                                           |
|                                     |                                                                                                           |
| ITEM 6.                                  | Exhibits                                                                                                       | 14 |
|                                     |                                                                                                           |   |
| SIGNATURES                               |                                                                                                           | 15 |

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|                                                                                                                                                                                       |   | March 31, 2011 |        |   | December 31, 2010 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|-------------|--------|-----------------------------|--------|
|                                                                                                                                                                                       |   | (Unaudited)              |        |   |                        |   |
| ASSETS                                                                                                                                                                                     |   |                     |        |   |                        |   |
| Current assets                                                                                                                                                                             |   |                     |        |   |                        |   |
| Cash and cash equivalents                                                                                                                                                                  |   | $                        | 8,327,319   |   |                        | $      | 8,983,281 |   |
| Accounts receivable                                                                                                                                                                        |   |                     | 1,571,381   |   |                        |   | 2,022,292 |   |
| Inventory                                                                                                                                                                                  |   |                     | 258,881     |   |                        |   | 683,546 |   |
| Prepaid expenses and deposits                                                                                                                                                              |   |                     | 408,218     |   |                        |   | 365,506 |   |
| Other receivables                                                                                                                                                                          |   |                     | 53,117      |   |                        |   | 48,717 |   |
| Total current assets                                                                                                                                                                       |   |                     | 10,618,916  |   |                        |   | 12,103,342 |   |
| Long term receivables - net                                                                                                                                                                |   |                     | 205,313     |   |                        |   | 205,313 |   |
| Property and equipment - net                                                                                                                                                               |   |                     | 2,415,165   |   |                        |   | 2,507,814 |   |
| Other assets                                                                                                                                                                               |   |                     | 10,000      |   |                        |   | 10,000 |   |
| TOTAL ASSETS                                                                                                                                                                               |   | $                        | 13,249,394  |   |                        | $      | 14,826,469 |   |
|                                                                                                                                                                                       |   |                     |        |   |                        |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                 |   |                     |        |   |                        |   |   |   |
| Current liabilities                                                                                                                                                                        |   |                     |        |   |                        |   |   |   |
| Accounts payable                                                                                                                                                                           |   | $                        | 917,974     |   |                        | $      | 870,009 |   |
| Accrued expenses                                                                                                                                                                           |   |                     | 597,432     |   |                        |   | 1,005,682 |   |
| Accrued compensation                                                                                                                                                                       |   |                     | 621,835     |   |                        |   | 507,341 |   |
| Customer deposits                                                                                                                                                                          |   |                     | 24,997      |   |                        |   | 126,282 |   |
| Billings in excess of costs                                                                                                                                                                |   |                     | 39,567      |   |                        |   | 6,505 |   |
| Total current liabilities                                                                                                                                                                  |   |                     | 2,201,805   |   |                        |   | 2,515,819 |   |
|                                                                                                                                                                                       |   |                     |        |   |                        |   |   |   |
| Total liabilities                                                                                                                                                                          |   |                     | 2,201,805   |   |                        |   | 2,515,819 |   |
|                                                                                                                                                                                       |   |                     |        |   |                        |   |   |   |
| Commitments and contingencies - See Note 9                                                                                                                                                 |   |                     |        |   |                        |   |   |   |
|                                                                                                                                                                                       |   |                     |        |   |                        |   |   |   |
| Stockholders’ equity                                                                                                                                                                 |   |                     |        |   |                        |   |   |   |
| Series A Convertible Preferred Stock, $.001 par value, 2,000,000 shares authorized;107,172 shares issued and outstanding at March 31, 2011 and at December 31, 2010                        |   |                     | 107         |   |                        |   | 107 |   |
| Common stock, $.001 par value, 125,000,000 shares authorized; 91,153,770 shares issued and outstanding at March 31, 2011 and 91,068,357 shares issued and outstanding at December 31, 2010 |   |                     | 91,153      |   |                        |   | 91,068 |   |
| Additional paid-in capital                                                                                                                                                                 |   |                     | 78,882,637  |   |                        |   | 78,738,520 |   |
| Accumulated deficit                                                                                                                                                                        |   |                     | (67,926,308 | )      |                        |   | (66,519,045 | ) |
| Total stockholders’ equity                                                                                                                                                           |   |                     | 11,047,589  |   |                        |   | 12,310,650 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                           |   | $                        | 13,249,394  |   |                        | $      | 14,826,469 |   |

----

|                                                             |   | For the three months endedMarch 31, |       |
|------------------------------------------------------------------|--------|--------------------------------------------------------------|------------|
|                                                             |   | 2011                                                         |       |   | 2010 |   |
|                                                             |   |                                                         |       |   |   |   |
| Revenue                                                          |   | $                                                            | 2,816,578  |   |   | $ | 3,594,778 |   |
|                                                             |   |                                                         |       |   |   |   |   |   |
| Cost of revenue                                                  |   |                                                         | 2,672,114  |   |   |   | 3,368,676 |   |
|                                                             |   |                                                         |       |   |   |   |   |   |
| Gross profit                                                     |   |                                                         | 144,464    |   |   |   | 226,102 |   |
|                                                             |   |                                                         |       |   |   |   |   |   |
| Operating expenses                                               |   |                                                         |       |   |   |   |   |   |
| General and administrative                                       |   |                                                         | 994,686    |   |   |   | 1,077,232 |   |
| Selling and marketing                                            |   |                                                         | 324,840    |   |   |   | 71,654 |   |
| Research and development                                         |   |                                                         | 186,201    |   |   |   | 32,862 |   |
| Total operating expenses                                         |   |                                                         | 1,505,727  |   |   |   | 1,181,748 |   |
|                                                             |   |                                                         |       |   |   |   |   |   |
| Operating loss                                                   |   |                                                         | (1,361,263 | ) |   |   | (955,646 | ) |
|                                                             |   |                                                         |       |   |   |   |   |   |
| Other (expense) income                                           |   |                                                         |       |   |   |   |   |   |
| Interest expense                                                 |   |                                                         | (1,411     | ) |   |   | (1,667 | ) |
| Interest income                                                  |   |                                                         | 1,248      |   |   |   | 2,462 |   |
| Total other                                                      |   |                                                         | (163       | ) |   |   | 795 |   |
|                                                             |   |                                                         |       |   |   |   |   |   |
| Net loss                                                         |   |                                                         | (1,361,426 | ) |   |   | (954,851 | ) |
|                                                             |   |                                                         |       |   |   |   |   |   |
| Preferred stock dividends                                        |   |                                                         | (45,836    | ) |   |   | (57,984 | ) |
|                                                             |   |                                                         |       |   |   |   |   |   |
| Net loss attributable to common stockholders                     |   | $                                                            | (1,407,262 | ) |   | $ | (1,012,835 | ) |
|                                                             |   |                                                         |       |   |   |   |   |   |
| Net loss per common share – basic and diluted              |   | $                                                            | (0.02      | ) |   | $ | (0.01 | ) |
|                                                             |   |                                                         |       |   |   |   |   |   |
| Weighted average number of shares outstanding, basic and diluted |   |                                                         | 91,058,783 |   |   |   | 89,000,884 |   |

----

|                                                                        |   | For the three months endedMarch 31, |       |
|-----------------------------------------------------------------------------|--------|--------------------------------------------------------------|------------|
|                                                                        |   | 2011                                                         |       |   | 2010 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                       |   |                                                         |       |   |   |   |
| Net loss                                                                    |   | $                                                            | (1,361,426 | ) |   | $ | (954,851 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |                                                         |       |   |   |   |   |   |
| Depreciation and amortization                                               |   |                                                         | 91,680     |   |   |   | 111,268 |   |
| Loss on equipment disposal                                                  |   |                                                         | 97         |   |   |   | 11,684 |   |
| Provision for losses on projects                                            |   |                                                         | (73,830    | ) |   |   | 29,000 |   |
| Non-cash stock based compensation expense                                   |   |                                                         | 91,590     |   |   |   | 525,657 |   |
| Changes in assets and liabilities:                                          |   |                                                         |       |   |   |   |   |   |
| Accounts receivable                                                         |   |                                                         | 450,911    |   |   |   | (1,398,777 | ) |
| Other receivable                                                            |   |                                                         | 800        |   |   |   | (15,618 | ) |
| Inventory                                                                   |   |                                                         | 498,495    |   |   |   | (9,218 | ) |
| Prepaid expenses and deposits                                               |   |                                                         | (42,712    | ) |   |   | 203,302 |   |
| Accounts payable                                                            |   |                                                         | 47,965     |   |   |   | 462,661 |   |
| Billings in excess of costs                                                 |   |                                                         | 33,062     |   |   |   | 128 |   |
| Accrued expenses, deposits and deferred rent                                |   |                                                         | (395,041   | ) |   |   | 326,514 |   |
| Net cash (used in) operating activities                                     |   |                                                         | (658,409   | ) |   |   | (708,250 | ) |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                       |   |                                                         |       |   |   |   |   |   |
| (Purchase) of land, building and equipment                                  |   |                                                         | (2,528     | ) |   |   | (14,244 | ) |
| Proceeds from disposal of equipment                                         |   |                                                         | 3,400      |   |   |   | - |   |
| Net cash provided by/(used in) investing activities                         |   |                                                         | 872        |   |   |   | (14,244 | ) |
|                                                                        |   |                                                         |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                       |   |                                                         |       |   |   |   |   |   |
| Exercise of stock options                                                   |   |                                                         | 1,575      |   |   |   | - |   |
| Net cash provided by financing activities                                   |   |                                                         | 1,575      |   |   |   | - |   |
|                                                                        |   |                                                         |       |   |   |   |   |   |
| Net decrease in cash and cash equivalents                                   |   |                                                         | (655,962   | ) |   |   | (722,494 | ) |
|                                                                        |   |                                                         |       |   |   |   |   |   |
| Cash and cash equivalents, beginning of period                              |   |                                                         | 8,983,281  |   |   |   | 9,604,643 |   |
|                                                                        |   |                                                         |       |   |   |   |   |   |
| Cash and cash equivalents, end of period                                    |   | $                                                            | 8,327,319  |   |   | $ | 8,882,149 |   |

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| 1.  | BASIS OF PRESENTATION |
|----------|-----------------------|

----

| 2.  | ACCOUNTS RECEIVABLE |
|----------|---------------------|

|                                                  |   | March 31, 2011 |      |   | December 31, 2010 |   |
|-------------------------------------------------------|--------|--------------------------|-----------|--------|-----------------------------|--------|
|                                                  |   |                     |      |   |                        |   |
| Contracts receivable                                  |   | $                        | 1,329,824 |   |                        | $      | 2,012,027 |   |
|                                                  |   |                     |      |   |                        |   |   |   |
| Costs and estimated earnings on uncompleted contracts |   |                     | 241,557   |   |                        |   | 10,265 |   |
|                                                  |   |                     |      |   |                        |   |   |   |
| Accounts receivable, net                              |   |                     | 1,571,381 |   |                        |   | 2,022,292 |   |
|                                                  |   |                     |      |   |                        |   |   |   |
| Short term receivable (contract retention)            |   |                     | 47,817    |   |                        |   | 47,817 |   |
| Long term receivable (contract retention)             |   |                     | 205,313   |   |                        |   | 205,313 |   |
|                                                  |   | $                        | 1,824,511 |   |                        | $      | 2,275,422 |   |

| Costs and Estimated Earnings on Uncompleted Contracts            |   |
|------------------------------------------------------------------------------------------------|--------|
|                                                                                           |   |   |   |   |   |   |
|                                                                                           |   | March 31, 2011 |   |   | December 31, 2010 |   |
|                                                                                           |   |   |   |   |   |   |
| Costs incurred on uncompleted contracts                                                        |   | $ | 32,149,258 |   |   | $ | 29,648,466 |   |
| Estimated earnings                                                                             |   |   | 2,423,165 |   |   |   | 2,359,922 |   |
|                                                                                           |   |   |   |   |   |   |   |   |
| Total billable costs and estimated earnings                                                    |   |   | 34,572,423 |   |   |   | 32,008,388 |   |
| Less:                                                                                          |   |   |   |   |   |   |   |   |
| Billings to date                                                                               |   |   | 34,370,433 |   |   |   | 32,004,628 |   |
|                                                                                           |   |   |   |   |   |   |   |   |
| Total                                                                                          |   | $ | 201,990 |   |   | $ | 3,760 |   |
|                                                                                           |   |   |   |   |   |   |   |   |
| Included in accompanying balance sheet:                                                        |   |   |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |   |   |
| Unbilled costs and estimated earnings on uncompleted contracts included in accounts receivable |   | $ | 241,557 |   |   | $ | 10,265 |   |
| Billings in excess of costs and estimated earnings on uncompleted contracts                    |   |   | (39,567 | ) |   |   | (6,505 | ) |
|                                                                                           |   |   |   |   |   |   |   |   |
| Total                                                                                          |   | $ | 201,990 |   |   | $ | 3,760 |   |

----

| 3.  | INVENTORY |
|----------|-----------|

|                          |   | March 31, 2011 |    |   | December 31, 2010 |   |
|-------------------------------|--------|--------------------------|---------|--------|-----------------------------|--------|
| Raw materials                 |   | $                        | 94,354  |   |                        | $      | 81,646 |   |
| Work-in-process               |   |                     | 164,527 |   |                        |   | 675,730 |   |
| Provision for loss on project |   |                     | -       |   |                        |   | (73,830 | ) |
|                          |   |                     |    |   |                        |   |   |   |
| Total                         |   | $                        | 258,881 |   |                        | $      | 683,546 |   |

| 4.  | PROPERTY AND EQUIPMENT |
|----------|------------------------|

|                                           |   | March 31, 2011 |       |   | December 31, 2010 |   |
|------------------------------------------------|--------|--------------------------|------------|--------|-----------------------------|--------|
|                                           |   |                     |       |   |                        |   |
| Land and buildings                             |   | $                        | 2,103,215  |   |                        | $      | 2,103,215 |   |
|                                           |   |                     |       |   |                        |   |   |   |
| Equipment                                      |   |                     | 2,234,935  |   |                        |   | 2,261,114 |   |
|                                           |   |                     |       |   |                        |   |   |   |
| Furniture and building improvements            |   |                     | 835,944    |   |                        |   | 835,945 |   |
|                                           |   |                     |       |   |                        |   |   |   |
| Software                                       |   |                     | 813,799    |   |                        |   | 813,799 |   |
|                                           |   |                     |       |   |                        |   |   |   |
| Total                                          |   |                     | 5,987,893  |   |                        |   | 6,014,073 |   |
|                                           |   |                     |       |   |                        |   |   |   |
| Less accumulated depreciation and amortization |   |                     | (3,572,728 | )      |                        |   | (3,506,259 | ) |
|                                           |   |                     |       |   |                        |   |   |   |
| Net property and equipment                     |   | $                        | 2,415,165  |   |                        | $      | 2,507,814 |   |

| 5.  | SHARE-BASED COMPENSATION |
|----------|--------------------------|

----

|                                                 |   | Three Months Ended March 31, |   |
|------------------------------------------------------|--------|--------------------------------------------------|--------|
|                                                 |   | 2011                                             |   |   | 2010 |   |
| Expected life (years)                                |   | 2.5 years                                        |   |   | 2.9 - 3 years |   |
| Dividend yield                                       |   |                                             | 0.0    | % |   |   | 0.0 | % |
| Expected volatility                                  |   |                                             | 93.6   | % |   |   | 93.6 | % |
| Risk free interest rates                             |   |                                             | 0.85   | % |   |   | 1.5 | % |
| Weighted average fair value of options at grant date |   | $                                                | 0.46   |   |   | $ | 0.22 |   |

| 6.  | SIGNIFICANT CUSTOMERS |
|----------|-----------------------|

| 7.  | NET LOSS PER SHARE |
|----------|--------------------|

----

|                                  |   | Three Months Ended March 31, |      |
|---------------------------------------|--------|--------------------------------------------------|-----------|
|                                  |   | 2011                                             |      |   | 2010 |   |
| Options to purchase common shares     |   |                                             | 4,135,505 |   |   |   | 5,382,432 |   |
| Warrants to purchase common shares    |   |                                             | 923,272   |   |   |   | 1,024,939 |   |
| Unvested restricted stock units       |   |                                             | 325,636   |   |   |   | - |   |
| Convertible preferred stock           |   |                                             | 107,172   |   |   |   | 135,572 |   |
|                                  |   |                                             |      |   |   |   |   |   |
| Total potentially dilutive securities |   |                                             | 5,491,585 |   |   |   | 6,542,943 |   |

| 8.  | DIVIDENDS |
|----------|-----------|

| 9.  | COMMITMENTS AND CONTINGENCIES |
|----------|-------------------------------|

----

| 10.  | SUBSEQUENT EVENTS |
|-----------|-------------------|

----

----

|                       |   | 2011   |       |   | 2010   |   |
|----------------------------|--------|--------|------------|--------|--------|--------|
| Revenue                    |   | $      | 2,816,578  |   |   | $      | 3,594,778 |   |
| Cost of revenue            |   |   | 2,672,114  |   |   |   | 3,368,676 |   |
| General and administrative |   |   | 994,686    |   |   |   | 1,077,232 |   |
| Selling and marketing      |   |   | 324,840    |   |   |   | 71,654 |   |
| Research and development   |   |   | 186,201    |   |   |   | 32,862 |   |
| Other (expense) income:    |   |   |       |   |   |   |   |   |
| Interest expense           |   |   | (1,411     | )      |   |   | (1,667 | ) |
| Interest income            |   |   | 1,248      |   |   |   | 2,462 |   |
|                       |   |   |       |   |   |   |   |   |
| Net loss                   |   | $      | (1,361,426 | )      |   | $      | (954,851 | ) |

----

----

----

| EXHIBIT NUMBER |         | DESCRIPTION                                                                                                                                                                                  |
|----------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1           |         | Form of Restricted Stock Unit.                                                                                                                                                               |
|           |         |                                                                                                                                                                                         |
| 31.1           |         | Certification of Principal Executive Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2           |         | Certification of Principal Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1           |         | Principal Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                          |
| 32.2           |    | Principal Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                          |

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| APPLIED ENERGETICS, INC.           |                                            |
|------------------------------------|-------------------------------------------------|
|                               |                                            |
| By                                 | /s/ Joseph C. Hayden                            |   |
|                               |  Joseph C. Hayden                          |   |
|                               |  President and Principal Executive Officer |   |
|                               |                                            |   |
| Date:  May 10, 2011 |                                            |

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